recession and recovery in north carolina: a data snapshot,...

daniel p. gitterman, peter a. coclanis, and john quinterno

recession and recovery in north carolina: a data snapshot, 2007–12August 2012

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recession and recovery in north carolina: a data snapshot, 2007-12 | gitterman, coclanis and quinterno

• The“GreatRecession”hasalteredNorthCarolina’slabormarketinunexpectedways.Threesignificanttrendsmeritattention:(1)theseverityoftheeconomicdownturn;(2)theslownessofthelabormarketrecovery;and(3)theshiftinthecompositionofthepopulationoflow-incomeandpoorhouseholds.

• Whilethedeclineinrealeconomicoutputbetween2007and2009waslesssevereinNorthCarolinathanintheUnitedStates,therecoveryinoutputthatoccurredbetween2009and2011wassomewhatslowerinNorthCarolinathaninthenation.EmploymenttrendsalsohaveprovenmuchmorevolatileinNorthCarolina.Indeed,themostrecentrecessionbatteredalabormarketthathadneverfullyrecoveredfromthe2001recession.

• AdefiningcharacteristicoftheGreatRecessionrelatestothewidespreadnatureofjoblossesinNorthCarolina.Payrollemploymentlevelshavefallensince2007inalmosteveryprivateindustrialsectorwiththeexceptionsofeducationandhealthservicesandprofessionalandbusinessservices.Ofthemajorprivatesectorindustrieswithsizablelevelsofpayrollemployment,constructionandmanufacturinghavecontractedthemost.

• Adistinctivefeatureoftherecessionisthatthelabormarketchallengeshavenotbeenlimitedtospecificdemographicgroups,thoughsomehavestruggledmuchmorethanothers.AlldemographicgroupsinNorthCarolinahaveexperiencedsignificanthardships.AccordingtotheU.S.CensusBureau,anaverageof8.3percentoftheWhite,non-Hispaniclaborforcewasunemployedbetween2008and2010,aperiodthatencompassestheheartoftherecessioninNorthCarolina.TheunemploymentrateamongAfrican-Americanworkerswas15.4percent,while12.4percentofHispanicworkerswereunemployed.

• While2011wasthebestyearfornetprivatesectorjobgrowthinsometime(+41,500jobs,+1.3percent),growthstillprovedextremelyweakinrelationtoalargejobgap.Restrainedgrowthhascontinuedin2012.Overthefirsthalfoftheyear,NorthCarolina’sprivate-sectorpayrollsnetted22,700jobs(+0.6percent)withtherateofgrowthdeceleratingbetweenthefirstandsecondquartersoftheyear.

• Sincelate2007,theshareofNorthCarolinianswithincomesbelow200percentofthepovertylevelhasclimbed.In2010,themostrecentyearforwhichdataareavailable,35.4percentofthestate’sresidentshadincomesbelow200percentofthepovertylevel,with17.5percentofthepopulationhadincomesbelowthepovertythreshold.Alarmingly,the17.5percentpovertyratepostedin2010wasthethird-highestannualfigurerecordedsince1980andthehighestloggedsince1982.

executive summary

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Figure1.CumulativeJobLosses,MeasuredFromLaborMarketPeaktoRecoverybyMonth(SeasonallyAdjusted),NorthCarolina,LastThreeRecessions

Figure2.ChangesinTotalNonfarmPayrollEmploymentLevel(SeasonallyAdjusted),NorthCarolina,October2008toJune2012

Figure3.NetChangeinNonfarmPayrollEmploymentLevelsbyIndustrialSector(SeasonallyAdjusted),NorthCarolina,December2007toJune2012

Figure4.NorthCarolinaMonthlyUnemploymentRates(SeasonallyUnadjusted),FromPeaktoRecovery,LastFourRecessions

Figure5.MonthlyUnemploymentRates(SeasonallyAdjusted),UnitedStatesandNorthCarolina,December2007toJune2012

Figure6.NorthCarolinaUnemploymentRatesbyCounty(SeasonallyUnadjusted),June2012

Figure7.ShareofPersonsBelow200%ofFederalPovertyLevelbyIncomeLevel,NorthCarolina,2002–2010

Figure8.NumberofPersonsParticipatinginSupplementalNutritionAssistanceProgram,NorthCarolina,December2007toApril2012

Table1.LaborForceEstimates(PeriodEstimates)bySelectedDemographicCharacteristics,NorthCarolina,2008–2010

figures and tables

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Recession and Recovery, 2007–12The“GreatRecession”hasalteredtheNorthCarolinalabormarketinunexpectedways.Threesignificanttrendsmeritourattention:(1)theseverityoftheeconomicdownturn;(2)theslownessofthelabormarketrecovery;and(3)theshiftinthecompositionofthepopulationoflow-incomeandpoorhouseholds.

NorthCarolina’sunemploymentrateof9.4percentinJune2012wasnearlytwiceashighaswasthecaseinDecember2007,adevelopmentthatunderscoresthemagnitudeoftheimpactoftheGreatRecessiononthestate’slabormarket.Furthermore,despitehavinggrowninpopulation,NorthCarolinahad5.3percentfewerpayrolljobsinJune2012thaninDecember2007.

Whilethedeclineinrealeconomicoutputbetween2007and2009waslesssevereinNorthCarolinathanintheUnitedStatesasawhole(−2.6percentversus−4.4percent),therecoveryinoutputthatoccurredbetween2009and2011wasslowerinNorthCarolinathaninthenation(4.4percentversus4.6percent).Moreover,employmenttrendshaveprovenmuchmorevolatileinNorthCarolina.Indeed,therecessionbatteredalabormarketthathadneverfullyrecoveredfromthe2001recession.Toputthematterbluntly,itisdifficulttooverstatetheproblemsthathavetroubledtheNorthCarolinalabormarketoverthepastdecade.Policywonksarestilldebatingsomeofthedetails,butnoonedoubtsthatconditionsremaindistressed.

IntheyearpriortotheonsetoftheGreatRecession,NorthCarolinahadanaveragemonthlyunemploymentrate(seasonallyadjusted)of4.7percent.Attheworstpointintherecession(January–February2010),thestate’sjoblessratereached11.4percent.NorthCarolinawasoneofonlyninestatestoexceedanunemploymentrateof11percent.1

AsMichaelWalden,awell-respectedNorthCarolinaStateUniversityeconomist,explainedinaNews and Observerpiece,“WhyN.C.LostSoManyJobs,”individualstatesdifferinindustrialcompositionandthereforearenotaffectedequallybyrecessions.Somearehurtmorebyeconomicdownturns.Therefore,ifastatehasagreaterrelianceonthetypesofeconomicsectorsthatareclobberedbyrecessions,thenthatstatewillseeabiggerjumpinunemploymentwhenrecessionshit.2In2007,almost22percentofourstate’seconomy(measuredbytheoutputofbusinesses)wasbasedonmanufacturing,comparedtothenationalaverageof13percent.3Thus,onereasonourlabormarkettooksuchabighitwastheeconomicdownturn’simpactonthemanufacturingsector.Yettheproblemsarenotsimplyproductsofthemanufacturingsector.NorthCarolinaalsohasafinance/insurancesectorandagovernmentsectorthatarerelativelylarge,aswellasasizableconstructionsector.Alloftheseindustrieshavestruggledindifferentwayssince2007.

IfstructuralreasonshelptoexplainwhyNorthCarolina’sriseinunemploymentsurpassedthenationalunemploymentrateduringtherecession,itisnonethelesstruethatNorthCarolina’srateofunemploymenthasbeenslowlydropping.Thatsaid,nearlytwiceasmanyNorthCarolinianswereunemployedinJune2012aswerejoblessandseekingworksomefourandahalfyearsearlier.Sincebottomingoutinearly2010,theNorthCarolinalabormarkethasreboundedsomewhat.InJune2012,thestate’s9.4percentunemploymentratewastiedwithSouthCarolinaforthenation’sfifth-highestrate,trailingonlyNevada,RhodeIsland,California,andNewJersey.

Theeconomicpicturemaybeimprovingabit,butNorthCarolinaisnotoutofthewoodsyet.Notbyalongshot.

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The Severity of the DownturnInDecember2007,thebroaderAmericaneconomyfellintothemostsevererecessionofthepostwarera,leadingeconomistPaulKrugmantolabelthedownturn“theLesserDepression.”4Comparedtopriorrecessions,thedownturnwasnotablefortheseverityofthedeclineinthelabormarketaswellasfortheextent,speed,andpersistenceofthedecline.5Aspreviouslysuggested,NorthCarolina’slabormarketneverreallyrecoveredfromthesevere2001recession.InDecember2007,thestatehadonly6.6percentmorepayrolljobs(+256,800)thanitdidinDecember2000.TheGreatRecessionwipedawaysome95percentofthatgrowth,andNorthCarolinaended2011withjust0.3percentmorejobs(+12,300)thanithadelevenyearsearlierdespitehavinggrown20.9percentinthepopulationofworkingageadults.(Overall,NorthCarolina’sentirepopulationgrewby18.5percentbetweenthe2000and2010decennialcensuses.)

Priortothedownturn,someforecasterspredictedthatNorthCarolinawouldnotbeparticularlyharmedbyarecessionsincethestate’shousingmarkethadnotoverheatedtothesamedegreeasoccurredinotherSunbeltstates.Whilethatpredictionprovedtrue,insomerespects,thenationalhousingcollapsestilldraggeddownthestate’seconomy.MorethanfouryearsaftertheonsetoftheGreatRecessionandtwoandahalfyearsintoatechnicalstatewiderecovery,itisclearthatNorthCarolinawasinnowayimmunetolargereconomicforcesandhassufferedmorethanmanyotherstates,atleastintheareasofjoblossandtheassociatedeconomichardshipsfacingworkers,families,andcommunities.

BetweenDecember2007andJune2012,NorthCarolinalost5.3percentofitspayrollemploymentbase.LossesoccurredrapidlybetweenOctober2008andMay2009andthenslowedbeforebottomingoutinFebruary2010,amonthinwhichthestatehad7.8percentfewerpayrolljobsthanitdidmorethantwoyearsearlier(seeFigure1).

figure 1 Cumulative Job losses, measured From labor market Peak to reCovery by month, (seasonally adJusted), north Carolina, last three reCessions

source: division of employment security, current employment statistics. south by north strategies, ltd. analysis.

1990-91 Recession2001 Recession2007 Recession

Cum

ulat

ive

Job

Loss

es A

s A

Per

cent

age

of P

eak

Mon

th

Months from peak

4-9.0%

-8.0%

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

2.0%

1.0%

0%

8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68

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Earlierintherecession,joblosseswereconcentratedintheprivatesector,withpublicsectoremploymentactingasastabilizingforce(seeFigure2).SinceFebruary2010orso,theoppositepatternhasprevailed.Theprivatesectorhasgrown,butcontractionsinthepublicsector,particularlyatthestateandlocallevels,havesignificantlyslowedgrowth.Publicsectorjobloss,forexample,offset19.8percentoftheprivatesectorgainsloggedin2011.

figure 2 Changes in total nonFarm Payroll emPloyment level (seasonally adJusted), north Carolina, oCtober 2008 to June 2012

source: north carolina department of commerce, labor and economic analysis division, current employment statistics. south by north strategies, ltd. analysis.

Theactualjobsgapisbiggerthantheonecausedbythelossofjobssince2007.TheNorthCarolinaeconomyneedstonetapproximately6,000jobspermonthmerelytokeeppacewithworkforcegrowth.Whenthose“missing”positionsareincluded,theactualjobgapfacingthestateinJune2012wasroughly540,000,accordingtoananalysisofdatacompiledbytheEconomicPolicyInstitute.6

OneofthemajorcharacteristicsoftheGreatRecessionrelatestothewidespreadnatureofjoblosses.Payrollemploymentlevelshavefalleninalmosteveryprivateindustrialsectorwiththeexceptionofeducationandhealthservicesandprofessionalandbusinessservices.Ofthemajorprivatesectorindustrieswithsizablelevelsofpayrollemployment,constructionandmanufacturinghavecontractedthemost(seeFigure3onthefollowingpage).Asaconsequenceoftherecession’srootsinahousingbubble,some25percentofthejoblossesinFebruary2010(themonthofmaximumjoblossinNorthCarolina)resultedfromlossesintheconstructionsectorandtherealestatesubsectorofthefinanceindustry.Another31percentofthelossesstemmedfromthemanufacturingsector.

In2011,thestate’sprivatesectornetted41,500additionaljobs,withmanyprivateindustrialsupersectorsloggingnetgrowth.Leisureandhospitalitygrewatthefastestrate(+2.3percent),drivenbygrowthintheaccommodationandfoodservicesubsector,whichaccountedfor24.6percentoftheyear’stotalprivatesectorgrowth.

Total nonfarmPrivate sector

45.0

35.0

25.0

15.0

5.0

(5.0)

(15.0)

(25.0)

(35.0)

(45.0)

2008

.10

2008

.12

2009

.2

2009

.4

2009

.6

2009

.820

09.1

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09.1

2

2010

.2

2010

.4

2010

.6

2010

.8

2010

.10

2010

.12

2011

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2011

.4

2011

.6

2011

.8

2011

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2011

.12

2012

.2

2012

.4

2012

.6

Chan

ge in

Pay

roll

Empl

oym

ent (

in 0

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7


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Nat

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ess S

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ces

-35%

-30%

-25%

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-10%

-5%

0

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-5.3% -20.3% -32.1% -17.9% -5.3% -4.7% -4.3%

2.6% 3.9%

-1.4% -13.3%

Gove

rnm

ent

0.8%

While2011was,relativelyspeaking,thebestyearofprivatesectorjobgrowthinsometime,growthstillprovedextremelyweakinrelationtothejobgap.Moreover,muchoftheprivatesectorgrowthwasinrelativelylow-value-added,low-wageindustriessuchasfoodserviceandretail.Restrainedjobgrowthhascontinuedin2012.Overthefirsthalfoftheyear,NorthCarolinagained20,400private-sectorjobs(+0.6percent).Almostallofthatgrowthoccurredintheprofessionalandbusinessservicesandthetrade,transportation,warehousing,andutilitiessectors.Moreover,thepaceofprivate-sectorjobgrowthdeceleratedduringthefirsthalfof2012,risingby0.7percentinthefirstquarterandthenfallingby0.1percentinthesecondquarter.

The Slowness of the Labor Market RecoveryInNorthCarolina,theGreatRecessionproducedalabormarketcrisis.Between2007and2009,realgrossdomesticproduct(GDP)inthestatefellby$9.9billion(2.6percent)asaconsequenceofdeclinesintheprivatesectorthatwereonlypartiallyoffsetbyincreasedgovernmentspendingthroughmechanismssuchastheAmericanRecoveryandReinvestmentAct.From2009to2011,NorthCarolinarecoveredallofitslostoutputandgeneratedarealGDPof$385.1billion,comparedto$378.8billionin2007. ±7

HighunemploymenthascharacterizedtheNorthCarolinaeconomysincelate2008.In2011,themonthlyunemploymentrateaveraged10.5percent,downfromanaveragemonthlyrateof10.9percentin2010.Furthermore,thestatewideunemploymentrate(seasonallyadjusted)equaledorexceeded10percentineverymonthfromMarch2009throughJanuary2012.Sincethen,theratehasfallento9.4percent.Thatsaid,some439,373NorthCaroliniansremainedofficiallyunemployedinJune2012.

figure 3 net Change in nonFarm Payroll emPloyment levels by industrial seCtor (seasonally adJusted), north Carolina, deCember 2007 to June 2012

source: north carolina department of commerce, labor and economic analysis division, current employment statistics. south by north strategies, ltd. analysis.

±Thegrowthinoutputwasdriveninpartbyincreasesinworkerproductivity;inotherwordsfewerworkerswereneededto

producethesame,ifnotgreater,amountofoutput.Thisdevelopmenthasincreasedthegapbetweenpotentialandactual

economicoutput--agapthatlikelywillnotcloseabsentincreasedeconomicdemand.

8


Toplacethecurrentunemploymentrateincontext,thehighestunemploymentrate(seasonallyunadjusted)recordedinNorthCarolinabetween1980and2008was11percentinFebruary1983(seeFigure4).Duringthattwenty-eight-yearperiod,therateexceededthe10percentthresholdfourtimes,allin1982and1983.SinceJanuary2009,however,theratehasexceeded10percentintwenty-sevenofforty-twomonthsandhasnotfallenbelow9.1percent,makingthecurrentdownturnbyfarthestate’sworstsince1980intermsofunemploymentlevelsandthedurationofhighunemploymentrates.

Thestate’slabormarket—asmeasuredintheunemploymentrate—hasfollowedadifferenttrajectoryfromthatofGDPandhasnotyetreturnedtoprerecessionarylevels.InDecember2007,some5percentofthestate’slaborforcewasunemployed(seasonallyadjusted),aswas5percentofthenationallaborforce(seeFigure5onthefollowingpage).8Bothratesmovedupwardin2008andthenspikedinthelastpartofthatyear.However,NorthCarolina’sratecontinuedtoclimbandcrossedthe11percentthresholdbeforedriftingdowntotheJune2012level.

Moreover,theunemploymentrateunderstatestheextenttowhichlaborisidleinNorthCarolina.Theunderemploymentrate,whichisamoreexpansivemeasureoflaborforceunderutilization,averaged17.9percentin2011.Withthismeasure,17.9percentofthestate’slaborforce(adjusted)wasunemployed,workingparttimeasaresultofalackoffull-timework,ormarginallyattachedtothelaborforce,acategorythatencompassesdiscouragedworkersorworkersinterestedinworkonlyifcertainpreconditionsaremet(e.g.,accesstochildcare).

NotonlyhasunemploymentsurgedacrossNorthCarolina,buttheshareoftheadultpopulationwithjobs(seasonallyadjusted)alsohasfallentonearthelowestlevelrecordedsince1976.InJune2012,just56.4percentofworking-ageNorthCarolinians(agessixteenandolder)wereemployed.Overtheperiodspanning1976to2007,in

figure 4 north Carolina monthly unemPloyment rates (seasonally unadJusted), From Peak to reCovery, last Four reCessions

source: north carolina department of commerce, labor and economic analysis division,, local area unemployment statistics. south by north strategies , ltd. analysis.

1980-82 Recession1990-91 Recession2001 Recession2007 Recession

Une

mpl

oym

ent R

ate

(%)

0.0

14.0

12.0

10.0

8.0

6.0

4.0

2.0

Months from peak

4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68

9


contrast,themonthlyemployment-to-populationratioaveraged63.6percent.Whilesomedegreeofdeclinecertainlyresultedfromtheagingofthepopulation,themagnitudeoftherecentdropsindicatesthatsignificantcyclicalforcesarealsoatplay.

Similarly,theshareofthecivilianworking-agepopulationparticipating(seasonallyadjusted)inthelaborforceishoveringnearthethirty-six-yearlowof61.6percentrecordedinearly2011.InJune2012,thestatewidelaborforceparticipationrateequaled62.2percent.Thisratewillinfluencethetrajectoryoftheunemploymentrateandthepaceofjobcreationneededtolowertheunemploymentrate.Thelowertheparticipationrate,thefewerjobsneededtoreduceunemploymenttoanygivenlevel.Ironically,then,theunemploymentratecouldfalleventhoughlargenumbersofpeopleremainjobless.

figure 6 north Carolina unemPloyment rates by County (seasonally unadJusted), June 2012

note: june 2012 dates are preliminary. prepared by north carolina department of commerce, labor and economic analysis division, july 2012 (current as of august 15, 2012)

5.0 to 8.0%8.1% to 10.0%10.1% to 11.0%11.1% to 13.0%13.1% to 18.0%

North Carolina rate 9.9%, not seasonally adjusted84 counties higher than previous month11 counties lower than previous month5 counties same as previous month

figure 5 monthly unemPloyment rates (seasonally adJusted), united states and north Carolina, deCember 2007 to June 2012

source: north carolina department of commerce, labor and economic analysis division, local area unemployment statistics. south by north strategies, ltd. analysis. note: y-axis begins at 4% to better illustrate changes.

Shar

e of

Lab

or F

orce

Une

mpl

oyed

Month

4%

6%

8%

10%

12%

2007.122008.6

2008.122009.6

2009.122010.6

2010.122011.6

2011.12

2012.6

North CarolinaUnited States

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Highratesofunemploymentarespreadacrossthestate.Evenin“low”unemploymentcountieslikeOrange,theunemploymentrateisunusuallyhighbyanyhistoricallevel.TaketheDurham-ChapelHillMetropolitanStatisticalArea(MSA),whichgenerallyhashadthelowestunemploymentrateofanyofthestate’smetropolitanareassincetheonsetoftheGreatRecession.InDecember2007,themetro’sunemploymentrateequaled3.8,butinJune2012,ittotaled8percent.Comparedtoroughlyfouryearsearlier,theregionalunemploymentrateinthestate’sbest-performingMSAwas4.2percentagepointshigher,whilethenumberofunemployedpersonswas2.2timesgreater.

Despiterecentimprovementsinlocallabormarketconditions,unemploymentremainselevatedacrossmuchofthestate.InJune2012,61ofthestate’s100countieshadunadjustedunemploymentratesatorabove10percent(SeeFigure6,previouspage).Intermsofgeography,themetrounemploymentrate(40counties)was9.4percent,comparedtoanon-metrorateof10.9percent.Meanwhile,thecombinedunemploymentrateinthe“BigThree”metroregionstheResearchTriangle,PiedmontTriad,andCharlotte—regionshometohalfofthestate’slaborforce—was9.2percent.TheTrianglehadthelowestrate(8.2percent),followedbythePiedmontTriad(10percent),andCharlotte(10.2percent).

table 1 labor ForCe estimates (Period estimates) by seleCted demograPhiC CharaCteristiCs, north Carolina, 2008–2010

Employment to Population Ratio Unemployment Rate

All Persons

Total 54.8% 9.3%

by Gender

Male 59.7% 9.7%

Female 50.3% 8.9%

by Race/Ethnicity

White, Non-Hispanic 57.7% 8.3%

Black/African American 53.3% 15.4%

Hispanic/Latino 63.8% 12.1%

Asian 61.8% 7.6%

Native American 47.2% 12.4%

by Age

16-19 28.3% 27.9%

20-24 58.2% 16.9%

25-54 70.2% 8.7%

55-64 53.7% 6.0%

65+ 15.3% 6.2%

by Education (ages 25-64)

No High School Diploma 51.5% 16.1%

High School Diploma/GED 65.9% 10.9%

Some College or Associate's Degree 72.1% 8.5%

Bachelor's Degree or Higher 81.2% 4.1%

source: us census bureau, american community survey, three-year estimates, 2008–2010, south by north strategies, ltd. analysis.

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A distinctive feature of the recession is that the labor market challenges have not been limited to specific demographic groups, though some population segments have struggled much more than others. All demographic groups have experienced significant labor market difficulties. According to the U.S. Census Bureau’s American Community Survey, an average of 9.3 percent of North Carolina’s civilian labor force was unemployed between 2008 and 2010, a period that encompasses the heart of the recession in North Carolina (see Table 1, previous page).

Between 2008 and 2010, male workers in North Carolina had, on average, a higher unemployment rate than female workers (9.7 percent versus 8.9 percent). In terms of racial and ethnic groups, Asians experienced the lowest average unemployment rate (7.6 percent), followed by white, non-Hispanic workers (8.3 percent), Hispanic workers (12.1 percent), Native American workers (12.4 percent), and African American workers (15.4 percent). The low employment-to-population ratios among African American and Native American workers (53.3 percent and 47.2 percent, respectively) were especially alarming. The remaining three racial/ethnic groups had employment-to-population ratios above the statewide average of 54.8 percent in 2008–10.

Unemployment by age also merits attention. On average, older workers (ages fifty-five and above) experienced lower rates of unemployment between 2008 and 2010 than did younger ones, especially those between ages twenty and twenty-four. Yet older workers who lost jobs had more difficulty finding new positions; nationally, half of all unemployed workers age fifty and older who were unemployed in 2011 had been jobless for at least six months.9 The high unemployment rates experienced by young adults also deserve attention, given the growing body of scholarly research that suggests that the economic conditions encountered upon initial entrance into the job market have significant lifelong economic impacts.

Unemployment rates by level of educational attainment among workers aged between twenty-five and sixty-four merit specific attention. Between 2008 and 2010, the average unemployment rate among adults with at least a bachelor’s degree was 4.1 percent, a level that was low relative to other groups but was actually was quite high for the reference population. In addition, some evidence suggests that the low unemployment rate among the population with at least a bachelor’s degree largely results from those with graduate degrees; adults with only bachelor’s degrees are faring less well. Finally, although they are better off than those with only a high school diploma, individuals with some postsecondary education or associate’s degrees are not performing as well as their more educated peers. The unemployment rate among individuals without high school diplomas averaged 16.1 percent from 2008 to 2010.

Average unemployment rates also increased from the prior three-year period (2005–7) for every major demographic group. The unemployment rate for those with at least a bachelor’s degree, for example, increased from 2.7 percent to 4.1 percent. In fact, the average unemployment rate was at least 1.5 times greater in 2008–10 than it was in 2005–7 for every educational group, with the rate increasing the most for those with some college or an associate’s degree.

12


The Shift from Working Poor to Poor HouseholdsSustainedhighunemploymentinNorthCarolinaisaproductoftherelativescarcityofjobsinthestateandinthelargerregion.Morebroadly,accordingtotheU.S.BureauofLaborStatistics,therewerethreeunemployedadultsouthernersforeveryavailablejobopeningintheregioninJune2012.Inshort,theresimplywerenojobsfortwoofeverythreeunemployedSouthernersinJune.Giventhelackofjobs,theeconomichardshipsassociatedwithjoblessnesshavemultipliedacrossthestate.

Sincelate2007,theshareofNorthCarolinianswithincomesbelow200percentofthepovertylevel($44,628forafour-personfamilyin2010)hasclimbed.10In2010,themostrecentyearforwhichdataareavailable,35.4percentofthestate’spopulationhadincomesbelow200percentofthepovertylevel,while17.5percentofthepopulationhad

incomesbelowthepovertythreshold(seeFigure7).Alarmingly,the17.5(basedonthegraph)percentpovertyratepostedin2010wasthethird-highestannualfigurerecordedsince1980andthehighestloggedsince1982.Furthermore,in2010,6.8percentofNorthCaroliniansexperienced“deeppoverty,”meaningthattheylivedinhouseholdswithincomesbelow50percentofthepovertylevel($11,157forafour-personfamily).

TherecentdownturnhasreducedtheshareofNorthCarolinianslivingin“workingpoor”households,meaningthosewithincomesbetween100and200percentofthepovertyline.Thischangeislargelyattributabletoindividualsfallingdowntheincomeladder—oftenpushedbyajobloss.11

Moreover,thechildpovertyrateinNorthCarolinareached25percentin2010,withanestimated259,000ofthestate’s560,000poorchildrenresidinginhouseholdswithannualincomesbelow50percentofthefederalpovertylevel.Tenyearsearlier,in

figure 7 share oF Persons below 200% oF Federal Poverty level by inCome level, north Carolina, 2002-2010

source: us census bureau, annual social and economic supplement, various years. south by north strategies, ltd. analysis.

% P

erso

ns b

elow

Inco

me

Leve

l

2002 2003 2004

Between 100% and 200% of FPL

Between 50% and 100% of FPL

Below 50% of FPL

2005 2006 2007 2008 2009 20100

5%

10%

15%

20%

25%

30%

35%

40%

20.1%

8.5%

5.8%

19.8%

7.8%

6.7%

20.9%

7.5%

5.6%

21.6%

7.6%

6.3%

19.1%

9.0%

6.5%

21.3%

6.9%

7.1%

19.0%

10.3%

6.6%

17.9%

10.7%

6.8%

21.5%

9.0%

6.7%

13


contrast,thechildpovertyrateequaled19percent—anunacceptablyhighrateinandofitself—with8percentofthestate’spoorchildrenlivinginhouseholdsexperiencingdeeppoverty.OnemajorconsequenceofthisrecessionhasbeenasurgeinparticipationintheSupplementalNutritionAssistanceProgram(SNAP),whichistheonesafetynetprogramwithuniformnationaleligibilitycriteria.BetweenDecember2011andApril2012,NorthCarolina’sSNAPcaseloadgrewby78.8percent,or727,332persons(seeFigure8)to1.7million,17.1percentofthestate’spopulation.Moreover,thespikein

NorthCarolina’schildpovertyrateisjustthebeginning.Atangleofassociatedsocial,educational,andhealth-relatedchallengescontinuestoplaguehundredsofthousandsofpoorchildren,asthe2012Kids Count Data Book,recentlyreleasedbytheAnnieE.CaseyFoundation,amplyattests.12

Insum,areviewofallrecentlabormarketdataindicatesthatNorthCarolinaisgrapplingwiththeworstemploymentdownturnsince1980.Jobshavedisappearedinalmosteverymajorindustry,andunemploymenthassurgedacrossalldemographicgroupsandcommunities.Althoughtheworstofthejoblossesappearstohavepassed,thestate’slabormarketstillisnotgrowingrobustlyenoughtoabsorballthosewhowantandneedwork,soafulleconomicrecoveryremainsadistantgoal.

figure 8 number oF Persons PartiCiPating in suPPlemental nutrition assistanCe Program, north Carolina, deCember 2007 to aPril 2012

note: the sizable increase in 9/11 is due to provision of temporary natural disaster assistance following hurricane irene.source: food research and action center compilation of usda data. south by north strategies, ltd. analysis .

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0

# o

f Per

sons

(in

000s

) Par

ticip

atin

g in

SN

AP

Month

Since 12/07, the number of North Carolinians participating in the SNAP program has increased by 727,332 (+78.8%). In 4/12, some 1.7 million individuals were participating. This is equal to 17.1% of the state's estimated 2011 population.

12/072/08

4/086/08

8/0810

/0812/08

2/094/09

6/098/09

10/09

12/092/10

4/106/10

8/1010

/1012/10 2/11

4/116/11

8/1110

/1112/11

2/124/12

14


1 State Unemployment Rate: Current Rate and Max for 2007 Recession,n.d.,http://4.bp.blogspot.com/-YV5eP3P_gGE/UAl0-9OxT5I/AAAAAAAAOQY/9iiF3-csXks/s1600/StateUnemployJune2012.jpg.

2MichaelWalden,WhyNorthCarolinaLostSoManyJobs,News and Observer,May20,2102,http://www.newsobserver.com/2012/05/20/2072771/why-nc-lost-so-many-jobs.html

3Author’sanalysisofU.S.BureauofEconomicAnalysis,Real GDP by State(millionsofchained2005dollars),June5,2012

4See,forexample,PaulKrugman,“TheLesserDepression,”New York Times,July21,2011,http://www.nytimes.com/2011/07/22/opinion/22krugman.html.

5TheNationalBureauofEconomicResearchdatestherecessionasunfoldingbetweenDecember2007andJune2009.Measuredstrictlyintermsofchangesinpayrollemploymentlevels,therecessioninNorthCarolinalastedfromFebruary2008untilFebruary2010.

6Author’sanalysisofEconomicPolicyInstitute,Job Watch: July 2012,July22,2012.

7U.S.BureauofEconomicAnalysis,Real GDP by State(millionsofchained2005dollars),June5,2012.

8Allunemploymentratesinthisparagraphareseasonallyadjustedfigures.

9ClaireMcKenna,Long Road ahead for Older Unemployed Workers(NewYork:NationalEmploymentLawProject,2012),1,http://www.nelp.org/page/-/UI/2012/NELP.older.workers.3.9.2012.pdf?nocdn=1.

10U.S.CensusBureau,Poverty Thresholds by Size of Family and Number of Children: 2010,http://www.census.gov/hhes/www/poverty/data/threshld/thresh10.xls.

11Asofthespringof2012,17.1percentofthestate’spopulationwasconnectedtotheSupplementalNutritionAssistanceProgram,forwhichhouseholdsareeligibleonlyiftheyhavemonthlyincomesbelow130percentofthepovertylevel($2,422forafour-personhousehold).

12AnnieE.CaseyFoundation,Kids Count Data Book,2012,http://datacenter.kidscount.org/databook/2012/.

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